Laurel Larson CPA

The tax filing deadline may be extended past April 15th. Stay tuned!

Happy 2020! Here are a few items of note for this year. The Secure Act was passed last month making some changes to retirement distributions. If you were born after July 1, 1949 such that you are not turning age 70 1/2 until after January 1, 2020, then you may delay taking your required minimum distribution from your retirement accounts until you reach age 72. If you have already begun taking the RMD based upon the old law, you need to continue using the old law to determi...ne your distribution. If you are a non-spouse beneficiary of a retirement account the rules have changed regarding when you must take the distribution. The general rule is that the distribution rate has accelerated to a 10 year period, but there are exceptions, so feel free to call me if you have any questions. Tax season officially opens on January 27, 2020 when the IRS will begin accepting electronically filed returns. By the end of the month you should be receiving your W-2 and other tax forms, be sure to review them for accuracy. If you need assistance or have any questions, I am happy to help.

When the tax law changes went into affect in 2018, many people found that not enough taxes were being withheld from wages or retirement payments. The IRS has updated the form which helps you figure out how much to withhold. It makes sense to take a look now,mid-year while there is still plenty of time to make adjustments.

Here's some important information that might help answer some questions you may have.

I am seeing balances due and smaller refunds with a number of my clients who have had tax withheld from wages. Now may be a good time to revisit the W4 Form and change the number of exemptions you are claiming. Otherwise the same thing will happen next year. Remember California has not conformed to the federal law, so if you typically get a refund for state, no need to change exemptions for the state. Also, even if you file early, the federal tax is not due until 4/15, so you can use your state refund to help pay the federal tax.

Update on government shutdown (01-17-19) The IRS has released updated information for activities that will (or will not) be conducted during filing season if the government shutdown continues. (Lapsed Appropriations Contingency Plan (Tax Year 2018 Filing Season)) Here are some of the key items of concern to taxpayers: The IRS will:... Continue activities to implement the Tax Cuts and Jobs Act; Process electronic and paper-filed returns (including amended returns); Issue refunds; Respond to taxpayer tax season questions (there is no mention of practitioners, so we should probably assume the practitioner priority line will not be staffed); and Continue to send out automated notices. The IRS will not: Process transcript requests (though they will for disaster victims, and for existing Power of Attorneys through e-services); Conduct any audit functions (unless the SOL is in danger of expiring); or Process new Power of Attorney requests. For the full text of the notice, go to: https://home.treasury.gov//IRS-Lapse-in-Appropriations-Con Also, per a previous IRS announcement: The IRS will begin accepting tax returns on Jan. 28, with nearly 155 million individual tax returns expected to be filed in 2019. The nation’s tax deadline will be April 15 this year.

Good news for taxpayers!

The IRS will honor returns sent electronically after the midnight deadline.

I’m finding that this new tax law is bringing about unexpected results when I compare 2017 returns with 2018 projections. Consider filling out an updated W4 form with your employer to adjust withholdings so you don’t get surprised next year.

This is a question I get quite often. Don’t throw your receipts away quite yet! Less than 3 weeks to file your return. It is crunch time for me! Laurel

Kathleen Pender from the SF Chronicle shares some interesting information regarding credit card rewards.

A recent press release from the IRS regarding scams.

Happy Holidays Everyone! As you may know, Congress passed a new tax law yesterday, effective for 2018 and beyond. One of the changes is that State income and property taxes paid as an itemized deduction is limited to $10,000. If line 9 on the Schedule A of your 2016 individual income tax return exceeded $10,000, in 2018, this deduction may be limited for you. One thing you can do before the end of the year is to pay State Income and property taxes earlier than you may norma...lly pay them while you still have the possibility of deduction. Now if you are subject to Alternative Minimum tax in 2017, this idea may not benefit you as much as it could, but it will definitely not provide a benefit for you in 2018, so in my opinion, it makes sense to make the payment if you can with the chance for deductibility. So, if you make your property tax payments on your home outside of an escrow account set up with your mortgage company, it makes sense to make the April 2018 installment prior to December 31, 2017. If you make estimated tax payments to the State, it makes sense to make the January payment this month. As for how the many other tax law changes are going to affect you in 2018, I will be taking classes in January so more posts to come! I hope you have a Merry Christmas and a Happy New Year! All the best, Laurel

There are currently two tax bills out there. It is difficult to know what the end result will be, so stay tuned!